Question 2 Answer saved Marked out of 90.00 Flag question Assessing Financial Statement Effects of Equity Method Securities The following transactions involve investments in marketable securities and are accounted for using the equity method. (1) Purchased 12,000 common shares of Barth Co. at $9 cash per share; the shares represent 30% ownership in Barth. (2) Received a cash dividend of $1.25 per common share from Barth. (3) Recorded income from Barth stock investment when Barth's net income is $80,000. (4) Sold all 12,000 common shares of Barth for $120,500. Balance Sheet Income Statement Expenses = Net Income Cash Asset + Noncash Assets = Liabilities + Contrib. Capital + Earned Capital Revenues $ 0 + $ 0 = $ 0 + $ 0 + $ 0 $ 0 - $ 0 = $ 0 Transaction (1) Buy 30% of Barth stock (2) Receive dividend (3) Recognize share of Barth net income (4) Sold Barth investment 0 + 0 = 0 + 0 + 0 0 0 = O 0 + 0 = 0 + 0 + 0 0 0 0 0 + 0 = 0 + 0 + 0 0 0 = 0